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Luckin Coffee will unluckin’ly delist from Nasdaq
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It was one of the fastest-growing startups in modern history and one of the most anticipated IPOs of 2019. But now, following the company’s disclosure of a potential fraud of hundreds of millions of dollars, Luckin’s journey is starting to meet its end.To get more news about luckin coffee delisted, you can visit shine news official website.
The company, in a statement today filed with the SEC, said that it would not contest Nasdaq’s decision to delist the company after having received two notifications in recent weeks of the stock exchange’s desire to push the China-based coffee chain from its market. It will officially stop trading Tuesday morning, meaning that Monday is your last day to trade LK, at least for the time being.
The saga of Luckin was an extraordinarily exciting one. Here was a barely two-year-old startup that was launching coffee “shops” and delivering cups of coffee faster than international incumbent Starbucks, which it had overtaken in total locations in China despite the latter’s multi-decade foray into the Middle Kingdom as it tried to convert local Chinese consumers from traditional tea culture.That growth led to a huge surge of interest from Wall Street for the company’s debut last year, and the company’s stock soared as its growth reached more dizzying heights. There was just one problem: little of that growth was apparently real.
This April, the company’s board started to investigate a $300 million fraud within its accounting books, discovering that the company had inflated sales by essentially having affiliated companies buy large orders of coffees that never got delivered. The tactic boosted sales figures and total transaction volume while helping the company’s margins look great (seriously, if you haven’t tried it, selling nothing for something is a great margin business). Of course, that’s fraud when you put it on a 10-K form and submit it to the SEC.